Health Plan Providers Have Good IT; Execs Want More

By Stacy Lawrence |
Posted 08-11-2005

Health insurers have driven much of the automation currently existing in the health care system, motivated by the need to ensure profitability and to be in compliance with HIPAA, or the Health Insurance Portability and Accountability Act.

For most insurers, claims, customer service and enrollment information are already largely automated. Still, many of these executives are seeking to integrate business enterprise applications even more fully into their businesses.

A recent survey by industry consultancy First Consulting Group of 65 executives at U.S. health plan providers found that 98 percent intend to increase automation within their organizations in the next one to two years.

Four out of five executives surveyed had found that these business process management tools could be used to increase productivity, reduce error rates, improve quality and reduce operating costs. Despite that optimism about automation, only one-third already have initiatives underway.

Most health plan providers, six out of ten, reported being able to measure error rates associated with manual processes, but only a little more than one-third could actually track the cost of the errors. And most executives expect to enhance existing systems or building custom components around existing systems to increase automation.

Plans to build custom components around an existing system are targeting better workflow tools that move work through a process and drop components of work into queues for people to process, thereby speeding up manual processes; enterprise application integration tools that exchange data between systems efficiently and eliminate the need for a person to extract information from a system manually; and rules engines that model and deploy decision logic within custom applications.

When asked to identify the degree of manual inefficiency in major operational areas, respondents indicated product development, sales and marketing, and commissions as the least efficient areas that are in need of greater automation.

The May 2005 survey polled senior-level health plan executives, CIOs, chief operating officers and CEOs at national, BCBS and regional plans, with membership ranging from 1,000 to over 3 million members.